Biden Administration moves to ban chip sales into China

02Sep

Biden Administration moves to ban chip sales into China

 

The Dow Jones Industrial Average and the S&P 500 ended the first day of September on a high note as traders looked forward to the jobs report tomorrow

The Dow cut its losses from earlier in the da jumping nearly 0.5 per cent, in the final minutes of trading. The S&P 500 rallied 0.3 per cent to 3,966.85, after trading lower for most of the day. Both snapped a four-day losing streak.

Meanwhile, the Nasdaq Composite fell about 0.3 per cent, to 11,785.13, to post its first five-day losing streak since February. It still came back from deeper losses earlier in the session.

The moves came as the 2-year US Treasury yield topped 3.5 per cent, the highest level since November 2007. That weighed on rate-sensitive growth stocks, making their future profits less attractive.

Overnight chipmaker Nvidia shares fell 7.7 per cent after the chipmaker said the US government is restricting some sales in China. The company said that US officials told it to stop exporting two top computing chips for artificial intelligence work to China, a move that could cripple Chinese firms' ability to carry out advanced work like image recognition and hamper Nvidia's business in China.

Other companies that make tool or design software have received similar letters in recent weeks informing them that the high-end technologies they export to China have been restricted.

The restrictions are part of a cold war between China and the United States for primacy in advanced technologies.  

To add to this, after years of growing their Chinese operations, US tech firms are starting to relocate production, with the moves small so far. Some of those moves include :

  • Apple moved some production of AirPods to Vietnam in 2020, where it also makes watches and iPads. More iPhone production will be done there as well.
  • Google will shift a portion of its latest Pixel phone manufacturing to Vietnam from China.
  • Microsoft’s Xbox and Amazon’s Fire TV devices, both of which used to be exclusively made in China, now ship from Vietnam and India

Over two decades, the tech industry has built up a low cost and formidable supply chain in China , but there is now a political push to diversify this supply chain. It looks like more and more capital is going to pull manufacturing out of China to find alternatives like Vietnam and India.

Across the sectors, markets were defensive as health care and utilities out performed while the oil price tumbled again on Thursday, as new Covid-19 lockdown measures in China added to worries that high inflation and interest rate hikes are denting fuel demand.Oil fell 3.3 per cent $86.61 per barrel.

Best performing industries included biotech, retail, media and real estate. Worst performers included industrial metals, precious metals, semi conductors and internet services.

Currencies

One Australian dollar has weakened by ½ cent compared to the US dollar yesterday, buying 67.91 US cents (Thu: 68.45 US cents), 58.82 Pence Sterling, 95.19 Yen and 68.27 Euro cents.

Commodities

Iron ore futures are pointing to a 2.9 per cent fall.

Gold prices fell below the key $1,700 level on Thursday for the first time since July, Gold lost $16.90 or almost 1 per cent to US$1709 an ounce.

Silver was down $0.22 or 1.2 per cent to US$17.67 an ounce.

Copper fell $ 11.20 or 3.2 per cent to US$340.65 a pound.

Oil fell $2.94 or 3.3 per cent to US$86.61 a barrel.

Futures

The SPI futures are pointing to a 0.3 per cent gain.

Figures around the globe

Across the Atlantic, European markets closed lower. Paris fell 1.5 per cent, Frankfurt lost 1.6 per cent and London’s FTSE closed 1.9 per cent lower.

Asian markets closed mostly lower. Tokyo’s Nikkei lost 1.5 per cent, Hong Kong’s Hang Seng fell 1.8 and China’s Shanghai Composite closed 0.5 per cent lower.

Yesterday, the Australian sharemarket lost over 2 per cent to 6846.

Ex-dividends

There are 17 companies set to trade without the right to a dividend.

Ampol (ASX:ALD) is paying 120 cents fully franked
Eagers Automotive (ASX:APE) is paying 22 cents fully franked
Big River Industries (ASX:BRI) is paying 10 cents fully franked
Base Resources (ASX:BSE) is paying 3 cents unfranked
Bravura Solution (ASX:BVS) is paying 3.2 cents unfranked
Coles Group (ASX:COL) is paying 30 cents fully franked
Cyclopharm (ASX:CYC) is paying 0.5 cents unfranked
Helloworld Travel (ASX:HLO) is paying 10 cents fully franked
Infomedia (ASX:IFM) is paying 3 cents 14 per cent franked
Kelsian Group (ASX:KLS) is paying 9.5 cents fully franked
Lifestyle Communities (ASX:LIC) is paying 6 cents fully franked
Mineral Resources (ASX:MIN) is paying 100 cents fully franked
Prime Financial (ASX:PFG) is paying 0.6 cents fully franked
Pental (ASX:PTL) is paying 1.7 cents fully franked
SDI (ASX:SDI) is paying 1.75 cents fully franked
Symbio Holdings (ASX:SYM) is paying 4.7 cents fully franked
Terracom (ASX:TER) is paying 10 cents unfranked

Dividends payable

There are five companies set to pay eligible shareholders today.

Hotel Property Investments (ASX:HPI)
Korvest (ASX:KOV)
Microequities Asset Management Group (ASX:MAM)
National Storage REIT (ASX:NSR)
QV Equities (ASX:QVE)

Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.
Copyright 2022 – Finance News Network


Source: Finance News Network

Share this post

Related Posts

02Apr

COVID-19 death toll climbs in the US: ASX poised to open lower

02 Apr 2020 - Following a slump on US markets, the ASX looks set to open lower. The US death toll rose to over 4,000. The Dow tumbled to near 1000 points. White House officials estimate that the COVID-19 outbreak will kill between 100,000 and 240,000 Americans this year, even with social distancing, business closures and other mitigation efforts. Spark Finance (ASX:SPK) has established two new committed revolving bank facilities.

Read More
21Aug

Dow records worst weekly performance since March

21 Aug 2023 - Stocks closed Friday's session with weekly losses, as Wall Street's August struggles continue.

Read More
04Aug

RBA holds rates: Aus shares close 1.9% higher

04 Aug 2020 - The local bourse managed to stay on a positive streak throughout the day after a strong start at the open, easing slightly through the afternoon ahead of the RBA's interest rate decision which remained unchanged amid the current climate. Wesfarmers (ASX:WES) has been forced to shut its Target and Kmart stores in the Melbourne metropolitan region during the stage four restrictions in Victoria due to Covid. Afterpay (ASX:APT) has raised $136 million from retail investors...

Read More
13Mar

ASX Bloodbath: Aus shares 7.8% lower at noon

13 Mar 2020 - The Australian share market opened to a bloodbath this morning dropping 7 per cent within the first 15 minutes of trade. It was a sea of red with not a single stock inside the top 200 trading in the green.

Read More
25Feb

Dow plunges as coronavirus fears grow: ASX poised to open lower

25 Feb 2020 - Following weak leads from US markets, the ASX looks set to open lower this morning. The Dow plunged as coronavirus fears grow. More cases emerged outside of China sending global stocks down. European stocks dropped and in Hong Kong the Hang Seng index fell almost 2%. Jumbo Interactive (ASX:JIN) has entered into a new SaaS 5 year licence agreement with MS Queensland.

Read More
19Mar

Pilbara Minerals (ASX:PLS) launches digital trading platform: ASX closed 0.7% lower

18 Mar 2021 - It's been a negative day of trade for the local market. After opening almost flat, the market continued to slide, extending yesterday's drop to close 49 points down. After data was released showing a better than expected improvement in the unemployment rate, the index lifted by 0.4 per cent. However, it failed to hang onto these gains. The S&P 500 and Dow Jones Industrial Average closed at record highs overnight after the US Federal Reserve...

Read More
17Dec

Trade deal sees global markets rise: ASX poised to open higher

17 Dec 2019 - Following positive leads from US markets, the ASX looks set to open higher. The partial trade deal between the US and China saw global share markets rise overnight. Tech and healthcare led the way in the US. Keytone Dairy (ASX:KTD) has completed the integration project between the two powder manufacturing facilities.

Read More
02Feb

Dow Jones rebounds: Apple, Amazon and Meta report results after hours

02 Feb 2024 - The Dow Jones Industrial Average rose Thursday as stocks recover from a dismal day for the major averages after the Federal Reserve held steady on rates but signalled that a March cut is unlikely.

Read More
24Jul

US job recovery stalls, rattling the markets: ASX poised to open lower

24 Jul 2020 - The ASX looks set to drop this morning with mixed results from the US overnight as their job market recovery appears to stall. Coronavirus infections across the US have now surpassed 4 million. Back home, our budget deficit hit almost $86b last financial year. Nufarm (ASX:NUF) has decided to change its financial year end from 31 July to 30 September.

Read More
06Dec

Hotter than expected US data fuels rate concerns: Oil price becoming a geopolitical football

06 Dec 2022 - Stocks fell Monday on fears that the Federal Reserve may continue tightening until it steers the economy into a recession. While the war in Ukraine grinds on, Western countries have been debating how to curb Russia’s oil revenue without causing massive disruptions to energy markets. They think they landed on an innovative solution: starting last Friday the G7 and Australia will apply a price cap of $60/barrel on Russian oil.

Read More